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PALO ALTO, CA-The locally based multifamily REIT Essex Property Trust Inc. has closed its second Apartment Value Fund with $266 million in equity. Using 65% leverage, the fund will have an investment capacity of about $750 million.Working within Essex’s strengths, the fund will acquire, renovate, develop and manage assets within Essex’s targeted West Coast markets. Seven of the nine Fund I investors, which includes Essex, are participating in Fund II. Essex has committed $75 million to Fund II, which represents a 28.2% interest as a general partner and limited partner. The objective of Fund II is to add value by identifying and acquiring assets in markets with high rental growth potential and then using Essex’s development, redevelopment and asset management capabilities to add value. Fund II will potentially invest in multifamily properties up and down the West Coast, but there will be an emphasis on investment opportunities in Seattle and the San Francisco Bay Area, markets many believe have hit bottom and are primed for recovery. Subject to specific exceptions, Fund II will be Essex’s exclusive investment vehicle for new investments until Oct. 31, 2006, or until the committed capital has been invested or committed for investments, whichever occurs first. Consistent with Fund I, Essex will be compensated for its asset management, property management, development and redevelopment services and may receive incentive payments if Fund II exceeds certain financial return benchmarks. The final closing of Fund II comes three months after Essex hired Credit Suisse First Boston “to evaluate strategic alternatives” for its inaugural fund, which typically means the “for sale” sign is up. The first apartment fund was organized in 2001 and now owns 17 properties concentrated in Southern California that have an estimated combined value of approximately $640 million.

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